HL Deb 05 June 1972 vol 331 cc128-55

8.55 p.m.


My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Stow Hill.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 1 [Duty to build dwellings properly]:

THE EARL OF KINNOULL moved Amendment No. 1: Page 1, line 5, leave out ("taking on") and insert ("undertaking").

The noble Earl said: I beg to move this Amendment. This small but important Bill seems destined either to be considered with extreme rapidity in another place or at an extremely late hour in this House; and I am sorry that this should have occurred. The purpose of this Amendment, together with the other 13 Amendments under my name, is to clarify Clause 1 which is causing some concern among a number of people and professional bodies because of its obscurity. My purpose to-night is to ask the noble and learned Lord, Lord Stow Hill, to consider whether certain alterations should be made in the drafting of the clause, not to alter its purpose but to assist the layman to interpret the clause when it reaches the Statute Book. In considering the Bill, we have of course the advantage of knowing the purpose of all the clauses following the very excellent Report of the Law Commission on the receipt of the Bill. The question on this Amendment which exercises the minds of the Law Society, I believe, and the Royal Institute of Chartered Surveyors, of which I must declare membership, is whether the purpose set out in the Law Commission's Report will be interpreted in the Bill as at present drafted, or whether the purpose in future will be frustrated because of long and fruitless litigation owing to obscurity in the drafting of the Bill.

I am sure that the Committee will agree that Clause 1 represents an important change in the law of property. It will obviously affect the owners, builders, contractors, sub-contractors, architects, surveyors and a whole host of people connected with property. The old caveat emptor principle, where purchasers of property had no redress on vendors unless it was clearly spelt out in the contract, is being changed. Vendors of new dwellings or of converted dwellings—one assumes that that would be flats in old converted houses—from now on will have a statutory duty to purchasers and no doubt this will be covered by insurance policies. I believe that this change will affect a great many properties, and particularly houses being converted. I noticed that the noble and learned Lord, Lord Stow Hill, mentioned that Victorian mansions and Elizabethan manors will not come within this clause. I would suggest to him that with the modern trend of converting properties into flats, these large old houses may very well be affected.

In moving Amendment No. 1, I should also like to speak to Amendments Nos. 4, 10, 12 and 13. This Amendment is simply to substitute for the expression "taking on work" that of "undertaking work". Criticism has been made of the expression, "taking on work". In the first place, I understand that the phrase is new to legislation and possesses no legal definition. In the second place, there is some doubt as to exactly what it means. Does it mean assuming responsibility for work and will it include work which is done by the owners themselves? Could it include persons who have only a tenuous connection with the provision of the dwelling? In this connection one has in mind estate agents and even building society valuers. Lastly, I should like to try, if I may, to convince the noble Lard, Lord Stow Hill, by drawing his attention to the fact that on page 24 of the Law Commission's Report the word "undertaking" appears rather than the expression "take on".


May I at the outset express my gratitude to the noble Earl for directing attention to this point and say to him perfectly frankly that when I first saw the expression "taking on" I did not like it. I wondered what it meant and I considered whether some change could be made. If I may say so, the matter has been most closely studied and alternative forms of words have been tried and considered by the Law Commission, by Parliamentary Counsel and, if I may say so very modestly, I have also tried very hard to find some phrase which would be more precise in this particular context.

The result of those endeavours has led back to the use of the expression "taken on", and I will explain why. Before I do that may I correct a wrong impression that some language which I used on Second Reading may have produced; namely, my reference to Victorian mansions and Elizabethan manors. The Law Commission formed the view that the principle, Caveat emptor, should not be interfered with in general but only in the limited category of cases which are referred to in Clause 1; namely, cases where fresh dwellings are provided. The provision of new dwellings can be brought about either by building them from scratch, or, if one looks at the words in line 7, "by the conversion or enlargement of a building". I accept that if you convert a Victorian mansion into a completely different dwelling, or perform a similar process on an Elizabethan manor, learned judges might well conclude on that language (and it would be within the intention of those who produced the Bill) that a conversion of such a manor or Elizabethan house might result in the provision of a new dwelling within the meaning of Clause 1. I hope that that has dispelled any misconception which I may have created.

May I try to answer the question which I posed as to why the word "undertaking" will be hardly suitable? The word "undertaking" seems to connote at first sight the notion of assuming a contractual obligation. To begin with, the clause is wider than that. It would cover the case of a person who builds his own house for his own residence. It could be said that he undertook the building of a house; but if you use a word like "undertake", which certainly has the ring of accepting a contractual obligation, it was thought—and I subscribe to that thought—that dubiety would be introduced into the clause and it would be more difficult for learned judges to construe its ambit. It was that consideration which, after mature experimenting, led back to the phrase "taking on work". A number of providers in a general sense are included: the builder, the developer who engages the builder to build a house, the local authority who engages labour to construct houses, the surveyor, the architect. All those persons can be said, so it is submitted to the Committee, in a broad sense to take on some part of the work which results in the provision of that house. I should be repeating myself if I said that we have found it extraordinarily difficult to light upon any expression which more effectively comprehends what is intended to be comprehended, than the expression we have used.

I do not know how far that explanation has carried conviction, but I hope that the noble Earl will accept that the matter has been thought out, though we have not found a better phrase. I submit that, for the reasons I have given, the phrase "undertaking" which he seeks to substitute also does not answer the question. I hope that, with that explanation, he will feel able to decide not to press his Amendment.


I am grateful to the noble Lord for his sympathy towards the clause. I am very willing to withdraw this Amendment.

Amendment, by leave, withdrawn.

9.5 p.m.

THE EARL OF KINNOULL moved Amendment No. 2: Page 1, line 6, leave out ("provision") and insert ("design or construction").

The noble Earl said: This is the second Amendment which tries to limit the category of persons involved in Clause 1. The Amendment is to leave out "provision" and insert "design or construction". As I understood the Law Commission's Report, they specifically stated that the category of people involved in Clause 1 was, as the noble Lord, Lord Stow Hill, stated, those who were owners, builders, sub-contractors and so on. I submit that the word "provision" as it reads in this clause could possibly go beyond the category that was intended by the Law Commission. I hope that is sufficient explanation, but if the noble Lord wishes me to explain further I am willing to do so.


I hope that the noble Earl will not think I am puffed up with conceit over the language that we have chosen. I respectfully submit that the word "provision" is the right one. One has to read the word "provision" together with the words in the brackets, "(whether the dwelling is provided …)". That links up with the word "provision". The subsection reads: … provision of a dwelling (whether the dwelling is provided by the erection or by the conversion or enlargement of a building …)". I submit that the connotation of those words makes it clear that what you are contemplating is the bringing into physical existence of a dwelling. The noble Earl, in the speech that he made on the previous Amendment, asked the question whether, for example, a building society valuer would be included. As the Committee knows well, the test that the court applies is what is the connotation of the language used in its ordinary English sense? I submit in answer to his question that you could not in any sense when you take the ordinary English meaning of the word "provision", especially reading it together with the words in the brackets, say that the valuer who advises a building society provides the house. He does not perform the same work in relation to the bringing into being of that house as, for example, the architect who designs it, who prepares the plan which is to result in its appearing as it ultimately appears, or the surveyor or the builder. All those people in a real sense provide the house. I would submit that the limit is pretty clearly drawn in a way which would exclude the case which the noble Earl gave.

I hope therefore that the noble Earl may feel satisfied with that answer. Again it is difficult to find the right language. Those who prepared the Bill tried very hard to find language more precise in its outline, but again they failed, and I hope that your Lordships will feel, on reflection, that the concept is sufficiently clearly expressed in the word "provision", whether the dwelling is provided by erection or by the conversion or enlargement of an existing building. That is the answer which I would respectfully offer to the noble Earl.


Before withdrawing the Amendment may I ask the noble Lord one question? If a property is defective and is sold by the vendor to the purchaser—and one assumes the surveyor has been involved on behalf of the vendor—he has a duty, I believe, under this clause. He has admitted in advising his client, the vendor, that this property is defective. When the building society valuer is instructed by the building society he has to answer questions not only to do with the value but to do with the construction of the property. Surely his responsibility is very close to that of a surveyor on behalf of the vendor?


I would answer the question by putting another to the noble Earl. He poses the case of the person who values the house. He may value it either on the instructions of a building society or on the instructions of the vendor, the purchaser and a number of people concerned in the transaction which results in the passing of the property in the house from the vendor to the purchaser. At what stage could it be said—if one adopts the ordinary English meaning of the language—that the valuer, in giving his advice, in any sense at all provides the house? He gives advice about it which is, as it were, entirely outside the function of bringing into physical being that house. He simply expresses an opinion that it is worth £x or £xx—it means very many thousands of pounds in the context of the present day—but you could not say of a valuer, by whomsoever in that context he is instructed, that he in any sense—the English language being used in its prima facie connotation—takes part in the provision of the house.


Obviously I am satisfied with the noble Lord's kind explanation, but there is one final point I should like to put. Am I right in saying that the surveyor on behalf of the vendor would be included under this word "provision"? Is that correct?


A surveyor might well take part in the provision. He goes into the house and he says. "You cannot sell this house with the floor in that condition", or, "The staircase is shaky and might lead to a disaster. I advise you strongly to have that staircase changed".

Again I am speaking off the cuff. This is the sort of thing which the courts would have to investigate and I cannot bind them; learned judges have to form their own independent view. But I do not think it could be said of a vendor's valuer who performs that actual function of going into the house and recommending that before the sale takes place certain changes must or ought to be made in the structure of the house, that in so doing he takes part in the provision of the house.


I am grateful to the noble Lord for that explanation and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.


Before I call Amendment No. 3 I should point out to the Committee that if this Amendment is agreed to I cannot call Amendments Nos. 4, 5 and 6.

9.14 p.m.

THE EARL OF KINNOULL moved Amendment No. 3: Page 1, line 14, leave out from ("that") to ("the") in line 16 and insert ("as regards the work which he undertakes").

The noble Earl said: The purpose of Amendment No. 3, as indeed of Amendments Nos. 5 and 6, is again to try to clarify what is considered by some to be slightly woolly drafting of this section of the clause. The question one naturally asks is: Why was it necessary to include in this clause phrases such as: to see that the work … is done in a workmanlike or, as the case may be, professional manner, with proper materials". I submit to the Committee and to the noble Lord that Amendment No. 3, which simply reads "as regards the work which he undertakes" so that the dwelling will be fit for habitation, covers entirely the words at present drafted in the Bill. I hope that that is sufficient explanation to the noble Lord. The purpose of the Amendment is simply to try to clarify the wording.

Perhaps I might quickly explain, it this is not acceptable, that Amendment No. 5 would cut out 11 words describing "workmanlike" with one simple word, "properly". I again suggest to the noble Lord that that would seem acceptable. Finally, Amendment No. 6, if Amendment No. 3 cannot be accepted, would cut out the words "proper materials". It has been suggested that the expression here in the Bill is indeed in the wrong place in any case: it should appear after "workmanlike" and not after "professional manner". I hope that that explanation is understandable to the noble Lord.

9.16 p.m.


I would say in answer to the noble Earl that there are two possible approaches here, of which one has been adopted by those who framed the Bill. One could use a word of rather general import such as "properly". One could use that and perhaps link it together with the words "fit for human habitation" and leave it at that. The alternative approach is to say to oneself: "We are considering here, first, builders, people who actually put the house together physically. Secondly, we are considering a range of professional persons. Thirdly, we want to sec what is the end result of their work." It is this latter approach which on reflection those who framed the Bill thought it was appropriate to adopt.

May I give an example as to why that approach was adopted? Supposing you get a builder who builds a house but uses material which could not be described as "proper material"; it is defective material in the sense that proper material would stand up for fifty years, whereas the material he uses is much less solid in quality. It will stand up for five, six, seven or eight years, and then it may well be that damp will come through and the wall will begin no crack, so that expense will be necessary and all the rest of it. If he has used that material the house is perfectly fit for habitation. He may have done his work in a work-manlike manner; the second-rate material is put together in a workmanlike manner. He is not a professional, so one does not have to consider the words "in a professional way" in respect to him. But this is the kind of situation which those who framed the Bill thought it necessary to avoid.

That being so, it seemed that the necessary conclusion of that way of thinking was that one should spell out what was required of those whose work together contributed to the provision of the house. Those who build it, the builders, must do it in a "workmanlike" way. The noble Earl said that that expression has given rise to doubt. I should have thought it is a word which is not infrequently found in the context of contracts, Statutes and decided cases, and that ordinarily, while language is often, in its very nature, ambiguous, that is a reasonably clear concept. Equally I would say the same with regard to the word "professional". When talking about the work of an architect one knows what that means. He can do his work in a had, slipshod fashion, and if he does so he is not doing it in a professional way.

I have already referred to the words "proper materials" and I hope I have also laid the foundation for the use of the words "fit for habitation". At least the building must be that. The materials may be first-class; the work may be highly professional and the work workmanlike in the extreme. But if the end result is something which a person cannot be expected to live in, again we say that those whose individual contributions produced the house which is not fit to live in have committed a breach of the duty created by Clause 1. I hope that, with that explanation, the noble Earl will feel that the choice that was made, of spelling out the obligation rather more fully than he does in his Amendment, was the right choice to make.


I am most grateful for that explanation. I wonder whether the noble Lord would address his mind quite briefly to the question as to whether the words "with proper material" should appear after "workmanlike". I think that might be better, and perhaps the noble Lord would consider it.


I see the argument and I should like to consider it. I quite understand the point raised by the noble Earl.


I am most grateful to the noble Lord, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.22 p.m.

THE EARL OF KINNOULL moved Amendment No. 7: Page 1, line 16, after ("be") insert ("reasonably").

The noble Earl said: The noble Lord, Lord Stow Hill, has just mentioned the expression "fit for habitation". In the Bill this expression is not given any definition. No doubt it is difficult to agree upon a precise definition, but I would submit that some guidance should be given both to the courts and to litigants as to the definition of the words, 'fit for habitation". I am suggesting in this Amendment that the word "reasonably" should be included. It is a small point, but I hope that it may be considered. I presume that the standard of fitness as defined in the Housing Act would be regarded as too low in the context of this Bill. Since I drafted the word "reasonably", it has been suggested that the expression "safe for habitation" rather than "fit for habitation" would be more applicable to this Bill because it would give a protection against injury rather than fitness for habitation. It is protection against injury in particular which this clause deals with. I beg to move.


So far as the words "safe for habitation" are concerned I think I may say that it was quite consciously the intention of those who framed the Bill that something more should be required than simply making the building safe. It has to be fit. The noble Earl now suggests that one should preface that with the word "reasonably". It is difficult to predicate precisely what the result will be. What is a house that is "reasonably fit for habitation"? If it is shockingly draughty, if it is gloomy in the extreme, if it shakes to bits when you walk across the floor, but if the rain comes through only in three or four places, instead of in two dozen places, I suppose one could argue—it depends on the circumstances—that it is reasonably fit for habitation. I dare say that a number of people might disagree about that. Personally I should disagree strongly.

The reason why I hope the noble Earl will not press this Amendment is that again it would introduce a considerable element of uncertainty. To say that something must be "reasonably fit" is telling the reader a certain amount but not really as much as he ought to know. It must be fit for habitation, and a properly built house containing good material and with the contributing labour carried out in a workmanlike and professional way. You have not to ask yourself the question, "If the rain comes in through two places does that make it not reasonably fit for habitation?" If the rain comes in, then the house is not fit for habitation and that is the end of it. There cannot be much uncertainty about that.


I am most grateful to the noble Lord. In fact, under the Housing Act the expression is "fit for human habitation". Should this not be in this Bill?


May I think about that?


I am most grateful for that. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.25 p.m.

THE EARL OF KINNOULL moved Amendment No. 8: Page 1, line 17, leave out ("when completed")

The noble Earl said: This Amendment is again a simple one to try to give a certain further clarification. The point has been made that under the present drafting one assumes that "when completed" refers to when practical completion has taken place; in other words, when the dwelling is ready for occupation. The danger is seen that if a vendor should leave the work uncompleted he could thus avoid the liabilities of Clause 1. In the absence of an architect's final certificate, it may be difficult to pinpoint the exact date of completion, particularly, of course, of conversions of flats. I hope again that I have said enough to explain the Amendment to the noble Lord. I beg to move.


I entirely agree that one has to be able to pinpoint some time as at which you have to be able to say of the house that it has been constructed in the right way. If one leaves out the words "when completed", I should have thought that one would be left in the dark. At what period of time are you saying it has to be fit for habitation? The logic, one would suggest, irresistibly compels one to the concept that it must be fit for habitation when it is finished, when the work is done. Those who framed the Bill have tried to comprehend that concept in these two words, "when completed". I quite agree that you may have a case where one of the window panes is not put in, or a couple of door handles are not properly adjusted, or something of that sort has not yet been done. But in answer to the question, "Could you say of a house that when it is still not finished that it is completed in the sense in which the words are used in this clause?" one would say, as we so often say. that this is the kind of situation which our judges can judge in substance. They always rescue us from situations of difficulty in which we find ourselves. They judge them by their obvious common sense and I should have thought myself that in any imaginary cases judges would not find it too difficult to say as a matter of fact whether one could reasonably predicate of this house that it was completed. They would ask themselves: "Are there too many aspects of it which require further work to be done?", but they might say, "The substance of the whole work has been carried out and even if there are one or two additions that have to be made here or there one cannot reasonably say that this house has not been completed."

I would submit that one certainly must have some words there to try to pinpoint a time, a reference by which to judge these matters. When one gets down to it, it is difficult to find better words than those, and they should not impose upon the judges a task beyond what they could reasonably be asked to undertake.


I am sure that the noble Lord will agree that the main purpose of this clause was to catch the so-called jerry-builders and developers. Suppose a jerry-builder builds a whole series of houses and sells them to the purchaser but without the houses being wired. And then he says to the purchaser, "You can buy the house as it is. I will then, under a new contract, wire the house at additional expense." In that case is it possible for the jerry-builder to escape liability under Clause 1?


Again it depends upon the circumstances. if anybody chooses to buy something which cannot really be called a house, largely because it has only progressed a very few steps from its birth towards its final adult life, the blood be on his own head. But when the noble Earl says, "Supposing it has not been wired, will the learned judge say it is completed?". I should have thought probably not. I should have thought that equally it would be said that the jerry-builder has not provided a dwelling. If anybody likes to buy something with the intention themselves of completing it, it does not fall within Clause 1. I can buy the foundation of a house, intending to put the rest up myself. Clause 1 would not operate, because that is not a case in which a dwelling has been provided.


With the greatest respect to the noble Lord, I believe I am right in saying that there are houses, probably new houses, where people prefer candles, other things than electricity. I should not have thought the learned judge would say that the builder has not provided a house because it has not got electricity.


Again I think the answer must be that it depends on the circumstances. It is difficult to be absolutely precise as to which way the learned judge would find.


This is the very point where one is seeking clarification; the clause is very obscure. It is all very well to say it depends on circumstances, but it is of little help to those who may be involved with this Bill at a later stage.


I wonder whether I can help my noble friend. I think he is losing sight of the fact that the words "when completed", which he seeks to delete from the clause, relate only to the last part of the sentence in subsection (1). The words "when completed" relate to the words and so that as regards that work"— the work which the person owing the duty has taken on— the dwelling will be fit for habitation when completed. In other words, if a house is designed to have electric light fitted, as most houses nowadays are, and the builder does his work so badly that no wiring is provided in the conduits, he is not doing the work he has taken on, which includes wiring, in such a way that when completed the house will be fit for habitation. On the other hand, supposing a bricklayer is operating on the "lump", as I believe it is called, and lays his bricks so badly that the house will fall down in a reasonably short time, notwithstanding that electric light has not yet been installed, he has broken his duty at that moment; the duty has been broken when the work is done which he has taken on. He does not have to wait until the house is completed. The words "when completed" relate only to the last part of the sentence. I hope that helps my noble friend.


It certainly does, and I am most grateful for the guidance of the noble and learned Lord. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.33 p.m.

THE EARL OF KINNOULL moved Amendment N0. 9: Page 1, line 17, at end insert— ( ) A person who undertakes any such work shall not under this section be liable in respect of any defect unless he shall have received notice of the defect within such time as is reasonable in all the circumstances after the defect was discovered or ought in all the circumstances to have been discovered.

The noble Earl said: I beg to move Amendment No. 9. Perhaps I could draw the attention of the Committee to Amendment No. 14 which is very similar in character. I hope the noble Lord, Lord Stow Hill, will agree to accept one of these Amendments. In the case of Amendment No. 14, perhaps I should draw his attention to a defect in my own drafting. It should read in the second last line of any defective work after the defect was discovered"— not "after it was discovered". Does the noble Lord follow that?




Again, some anxiety has been expressed that there is nothing in the Bill which puts the duty on a purchaser to notify promptly to the vendor, who, as we appreciate, will now be liable, any defects within a dwelling. The costs of remedying a defect can of course be substantially increased. I suggest that the vendor or the builder should be liable for damage under Clause 1, but only to the point where a defect ought reasonably to have been seen, and not for any consequential damage. Amendment No. 9 is so drafted that, if the purchaser does not notify the vendor within a reasonable period of time, the vendor will be completely absolved from any liability, but that may be going a little far. Amendment No. 14 is intended to protect the vendor against any consequential damage after a defect has been notified. I have not described the purpose of this Amendment very clearly, but I hope that the noble Lord has seen what I am driving at. I beg to move.


The noble Earl has made very clear to me what his view is, and what the contention is which he desires to put forward. I would respectfully agree with him that Amendment No. 9 goes much too far and that, in any event, under the existing law, under a principle to which I will make reference in a moment, a good deal—although not all—of what he wants to achieve by Amendments Nos. 9 and 14 is already achieved. That principle is that if you complain of somebody else's action and say that it caused damage to yourself, you are under a duty to take reasonable steps to mitigate that damage. If somebody breaks a contract with me, or somebody negligently pushes me over in the street, or somebody does some other act which gives me a right to corn-plain against him, I cannot recover by way of damages from him for damage which really results from the fact that I failed to take sensible steps to see that the damage was not more than it otherwise might be. That principle is statutorily described by the words: "It is the duty of a person to take reasonable steps to mitigate his own damage."

If one goes back to Clause 1 and assumes that the builder, the architect, the vendor or whoever it might be has rendered himself liable to proceedings because he has committed a breach of the duty which is created by Clause 1, the person who complains of that breach will not be able to recover from him damages which that person, by taking reasonable steps, could have avoided occurring. Therefore, if the purchaser, or some successor in title from the purchaser, knows perfectly well that something is going wrong and ought, as a matter of common sense, to let the builder, or whoever is the person against whom he feels he has a complaint, know about it, then I would respectfully submit—and I hope that the courts would so find—that that is a clear case in which the purchaser, or the successor in title, failed to take sensible steps to prevent the damage from being larger than it might be, and therefore he cannot recover for that increase in damage which he himself, by sensible precautions, could have avoided. If one applies that principle, it produces the result which is the fair result as between the two of them. The builder has committed a breach, but the purchaser or the successor in title must not aggravate the consequences of the breach by his own foolish conduct. That is the fair result between them, and that is produced by the existing law as applied to the provisions of Clause 1. I hope that that explanation will satisfy the noble Earl.


I am most grateful to the noble and learned Lord. I was not aware that the existing law applied. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.40 p.m.

THE EARL OF KINNOULL moved Amendment No. 11: Page 2, line 13, leave out ("in") and insert ("for").

The noble Earl said: This again is a simple drafting Amendment. As to its purpose, the Committee will recall that the Law Commission's Report stated specifically, in relation to the parties to be caught within the net of Clause 1, that, in addition to the owner, the developer, the contractor and the subcontractor, the intention was to include suppliers of purpose-built components but not suppliers of mass-produced components and general building materials. The questions I should like to put to the noble Lord, Lord Stow Hill, are these. First, what is the real difference between these classes—that is, the suppliers of purpose-built components and the suppliers of mass-produced components? And is the drafting as it is at present sufficient to carry out in the future the intention that the Law Commission had? Secondly, I should like to ask the noble Lord how prefabricated houses are treated under this clause. Finally, I should like to ask this question. The present description is "installations in dwellings". What would happen if a gutter, affixed to a dwelling but outside that dwelling, became defective? Would this be caught under this clause? Because at the moment it specifically says "in" dwellings. I respectfully suggest that if he accepts the word "for", this would include the guttering. I beg to move.


The answer that I would offer to the noble Earl's argument is this. It really will not make much, if any, difference if we substituted the word "for" for the word "in". My reason for saying that is this. If you look at subsection (4), you will see that all subsection (4) is describing is the category of providers who are brought within the scope of the clause at all. If you are talking about somebody who installs pipes in a house—that would be an installation—he has got to be a person whose business it is to provide, in this case, pipes in a house. That clearly would be an installation. Once you have got him within the scope of the general description in subsection (4), you then go back to ask: Has he, in terms of subsection (1), contributed to the provision of the house? That being so, I submit to the noble Earl that it does not really make any difference whether you speak of him as a person whose business it is to provide installations "for" or "in" a house. They are house installations—pipes, or something of that sort.

Then the noble Earl asked me what is the position if guttering attached to the outside of a house is defective and collapses, whether because it is not put up in a workmanlike manner or because the materials are inadequate, or something of that sort. The answer is that there would be a claim in respect of that, because that would be a case in which the gutter provider, whoever he may be—the builder, or a person who specialises in the provision of piping or drainage, or whoever he may be—has contributed within the terms of subsection (1) to the provision of the building, and he either has not used proper materials or has not done his work in a workmanlike way. Therefore, my answer to the question would be: Yes, there would be a right to claim damages in that case, always subject, of course, to the provisions of the Limitation Acts, which are made applicable by subsection (5) of Clause 1; that is to say, for six years after the building is completed he would be liable in damages, or, if the gutter fell on somebody and caused personal injuries, for three years from the completion of the building.


I am again most grateful to the noble Lord for his explanation. I do not think he in fact quite answered the first point I made to him, which was this. He stated quite rightly that subsection (4) describes the categories of people. I mentioned to him that the Law Commission specifically stated that they wanted to include suppliers of purpose-built components but not suppliers of mass-produced components. Could the noble Lord tell me how this would be effected by the Bill?


I think the answer is that that depends very much on the ordinary English connotation of the word "installation". What is an installation? A tap is one, I should have thought; and I can think of a lot of things that are not. A block of wood probably is not. A brick, I should have thought, which forms part of the floor is not an installation; but if you put in a basin or a sink you are providing installations. Again, what does the word "installation" in its ordinary English connotation include? I think that, generally speaking, that question is one which can be answered without too much difficulty. But I failed to answer the question which the noble Earl asked about prefabricated houses. I should have thought that a prefabricated house if constructed and supplied, whether on a lorry or otherwise, is one which falls directly within the scope of subsection (1). It is a case in which a new dwelling is provided. A duty arises, therefore, in relation to that new dwelling.

Amendment, by leave, withdrawn.

On Question, Whether Clause 1 shall stand part of the Bill?


Under subsection (2) of Clause 1 the builder who is registered within the N.H.B.R.C. will be excluded from any liability. I believe that the present liability given under the N.H.B.R.C. certificate is a limited one of £5,000 per dwelling. I should like to ask whether, on present-day costings, £5,000 is sufficient limited liability for builders with this certificate of the N.H.B.R.C. Should not this sum be increased?

Secondly, those builders who are not registered with the N.H.B.R.C. will be subject to liability on conversions of old dwellings. The N.H.B.R.C. in their wisdom have decided that to include conversions under their certificate would not be practicable. It is far too difficult and complicated. I would ask the noble Lord why it is deemed practicable for those builders who are not registered and deemed impracticable for those who are registered.


I can perhaps assist my noble friend before Lord Stow Hill replies. I should point out to my noble friend that the exclusion scheme comes under Clause 2 and that we are talking about whether Clause 1 shall stand part of the Bill. I think that that should be borne in mind. Secondly, the approval of a scheme under Clause 2 is a matter for the Government, for the Secretary of State; and the Secretary of State has under the provisions of Clause 2(4) a power to vary an order approving a scheme. This would cover my noble friend's point about the maximum. One hopes it will not happen, but, no doubt, things being as they are, the value of money may decrease still further. No doubt my right honourable friend will bear that in mind.

As regards the last point, perhaps I should leave the noble and learned Lord, Lord Stow Hill, to reply as it is his Bill. But I think the position is that the duty imposed by the Bill as drafted is an underlying duty which would apply to everyone except in so far as they were covered by an approved scheme which, at any rate in theory, is not one limited to the scheme that my noble friend has mentioned. Therefore, there is no inconsistency or discrimination, as I understand it, in the Bill as drafted. But I will leave the second point to the noble and learned Lord, Lord Stow Hill, who is more familiar with the terms of the Bill than I am; but I think that is the answer.


I am most grateful to the noble and learned Lord the Lord Chancellor for what he has said, and may I respectfully say that I entirely endorse what he said. With regard to the last point, it is true that the Bill was deliberately framed in this way. Clause 1 relates to "provision" in the general sense as enlarged by the words in the brackets. Clause 2 exclusion is limited to the erection. Subject to this, it is not only the erection, it is first sale or letting for habitation. So that, in a sense, Clause 2 is slightly more enlarged in ambit than Clause 1, and in another sense it is more restricted. That is the way it has been drafted. It may be that the drafting needs reconsideration, but, whether or not that intention is the best in the circumstances, that is the intention of those who framed the Bill. I frankly admit that the word "erection" is more limited than the word "provision". That is not by accident but by design. As the noble and learned Lord the Lord Chancellor has said, Clause 2 applies in general to approved schemes. It is not limited to the National Housebuilders' Registration Council. That certainly was the scheme that those who framed the Bill had in mind.

As the noble Earl may know, the Law Commission thought that the ambit of Clause 1 should include even houses that were subject to National Housebuilders' Registration Council approval. But it was thought by those who drafted the Bill that inasmuch as the advantages under an approval by that Council are very substantial, and in many ways exceed the benefits which Clause 1 could confer, the exception in Clause 2 should be made. I will mention one example. Suppose, under Clause 1, you have a claim against a builder who is very unsubstantial and quite unable to pay £5,000, or £2,000, or £500. You have the resources of the National Housebuilders' Registration Council behind you, or rather the builder does; and the builder's default and the damages he may be ordered to pay will be met by the Council, subject to certain obviously necessary limits. That I think must be the answer to the question why the limit is £5,000. I should have thought that, with the financial possibilities of the Council, not to impose some limit might result in a very difficult decision; and after all, £5,000 is a pretty substantial amount when one considers that it stands behind a builder who is unable from his own resources to meet a comparatively small sum in damages.


I am most grateful to the noble and learned Lord. Lord Stow Hill, and to the noble and learned Lord the Lord Chancellor for clarifying my mind. Not that I would wish to attack the N.H.B.R.C. for which I have the greatest respect. But the builders that the Council stands behind are on a list prepared by the Council and are substantial so I should not have thought that it had a great effect.

Clause 1 agreed to.

Clause 2 [Cases excluded from the remedy under section 1]:

9.55 p.m.

THE EARL OF KINNOULL moved Amendment No. 15: Page 3, line 33, at end insert— ("(7) No action shall be brought for breach of the duty imposed by section 1 above by any person acquiring an interest in any dwelling in circumstances in which that person is an authority possessing compulsory purchase powers within the meaning of the Town and Country Planning Act 1971.")

The noble Earl said: I should like the Committee to consider Amendment No. 16 with this Amendment. Both deal with the situation in cases that arise under compulsory purchase orders. I believe that there is a strong feeling that a compulsory purchase order is not a normal contract of sale. This is usually the case of an unwilling seller and a willing buyer and not a willing seller and a willing buyer. Furthermore, under the special procedure of a compulsory purchase order the purchaser is not liable or subject to any liabilities as a normal purchaser is—and one example is that of restrictive covenants. It is true that under compulsory purchase law the purchaser has to give full compensation. But, as I said, feeling is strong that there should be some acknowledgment that a compulsory purchase procedure is very different from the normal contract for buying and selling.

Amendment No. 15 goes fairly wide and includes all owners or vendors. In the case of Amendment No. 16, this limits owners to those who have built the house themselves with their own hands or have instructed the builder to build the house for their own occupation. Again I would remind the noble Lord that in this sort of case they have no intention of selling the house willingly. The case of the owner who has built the house with his own hands is, I believe, particularly strong, and if the noble Lord feels unable to accept either Amendment No. 15 or Amendment No. 16, perhaps he will consider on the Report stage the case of the owner who has built the house with his own hands. I think that covers all the points that I wish to make, except that if the noble Lord is agreeable at all to consider Amendment No. 16, I understand that the words could be, "or to the order of" in the first line of Amendment No. 15, and I should be happy at the next stage to withdraw those words. I beg to move.

9.57 p.m.


Perhaps I can be quite candid with the noble Earl and say that when I first looked at his Amendment I felt considerable sympathy with it, and I still do. I have, on reflection, after consulting those who have been so good as to advise me, decided to come down, rightly or wrongly—perhaps wrongly, but I hope rightly—in favour of the opposite view. But there are clearly arguments on both sides. May I try to state them? I will come first to the two Amendments. The first, as the noble Earl said, is really much too wide. But the second is limited to the case of the person who builds his house or procures it to be built for his own occupation. Again, I would submit to the Committee that as it stands it is too wide. To begin with, it would exonerate the builder; it would exonerate the architect; it would exonerate all sorts of people who have no claim to exoneration by reason of the fact that there is compulsory acquisition from the owner-occupier who had it constructed. The builder has no claim to ask to be exonerated in a situation of that sort; nor have the other people whom I have mentioned. The only person who has such a claim, and whose situation I must confess influenced me, is the person who procured the house to be built for himself.

What are the considerations which finally brought me down, rightly or wrongly, on the other side? The sort of case envisaged must be a rare case. If a person builds a house for himself and is unfortunate enough to have it taken from him under a compulsory purchase order, this must be due to one of two things. It may be (and this may be the more probable) because a road is to he built through, and the house is to be demolished, or something of that sort. In such a case he will receive compensation. It may well be that he will have a claim against persons who wrongly advised him that there was no known development scheme by the local authority under contemplation. After all, normally speaking, you look to see whether there is any road development scheme which may affect you, and those who advise you may be liable to heavy damages for not having made the proper researches.

Or it may be that the local authority wishes to acquire a man's house, not to pull it down but to use it in connection with a housing scheme or to provide dwellings pursuant to one of the Housing Acts, or something of that sort. If that is the situation, can it not be fairly argued against the person who has built that house for himself in this way: "You built the house; you knew perfectly well that you would not be there for ever. You may want to sell it, and it is the act of building a new house which places upon you a responsibility to the other people who may thereafter live in that house to see that it is properly built from the point of view of the standards set out in Clause 1. You may die; there may be successors of yours in title—who knows? You may want to sell it, and, if so, you ought to have in mind that those persons who buy the house from you should be entitled to look to you for compensation if you are the person who was originally responsible for the bringing into being of that housing unit."

Rightly or wrongly, those conclusions led me to the view that the balance of the argument—though the case may seem hard, and is hard in individual circumstances—is in favour of leaving the clause as it is. In any event, for the reasons I would respectfully submit to the noble Earl, both his Amendments go far too wide, in the sense that I have indicated; and I hope he will agree with me that the right course is to leave the clause as it is, the balance of argument being as I have sought to describe it. Between now and Report, if he feels dissatisfied with my answer, of course he can come back to it and the matter can be decided by a vote of the House, if necessary, at a later stage of the Bill. But I hope that he will think there is at least an arguable case in what I have said and will not press his Amendment.


In view of the size of the Committee, I certainly should not think of pressing the Amendment now, although I understand that the next phase of the Bill will arrive within thirty-six hours and so we do not have a great deal of time to consider further Amendments. The noble Lord says that both Amendments are too wide. I accept that entirely, but I am very disappointed that he did not come down in favour of the case that I described at the end. Admittedly, I did not put it into the Amendment.


Perhaps I did not express myself clearly. Even assuming that his Amendment were narrowed in order to operate solely to the advantage of the person who built the house for himself, I still think that the balance of the argument lies in the scales as I sought to weigh them. But the noble Earl can of course come back to that if he is not satisfied, on thinking over what I have said.


Perhaps I ought to say this. We are rather thin on the ground at this hour of night, and I think that a question of policy is to some extent involved in this Amendment. If my noble friend will withdraw his Amendment now I will put it to officials as to whether something can be done for him, if the noble Lord, Lord Stow Hill, would have no objection to this course. Obviously we are not sufficiently representative to-night to take the view of the Committee.


I willingly accept what has been said. I beg, leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 agreed to.

Clause 4 [Landlord's duty of care by virtue of obligation or right to repair premises demised]:

10.4 p.m.

LORD STOW HILL moved Amendment No. 17:

Page 4, line 29, leave out from ("means") to end of line 33 and insert— ("(a) where the tenancy commenced before this Act, the commencement of this Act; and (b) in all other cases, the earliest of the following times, that is to say—

  1. (i) the time when the tenancy commences;
  2. (ii) the time when the tenancy agreement is entered into;
  3. (iii) the time when possession is taken of the premises in contemplation of the letting").

The noble Lord said: This Amendment, although it is a long one, is purely a drafting Amendment. The clause as at present formulated, by a mere accident omits to provide for the case in which the tenancy commenced before the Act. Without going through the detail of it, your Lordships will see that it provides for a number of other situations, but accidentally that particular one is left out. It is filled in Amendment 17, in paragraph (a), which says: Where the tenancy commenced before this Act,…".

The relevant time is the commencement of the Act. I beg to move.

On Question, Amendment agreed to.


Before I call Amendment No. 18 I should point out to the Committee that if this Amendment is agreed to I cannot call Amendment No. 19.

LORD STOW HILL moved Amendment No. 18: Page 4, line 37, leave out from ("when") to ("shall") in line 38 and insert ("he first is, or by notice or otherwise can put himself, in a position to exercise the right and so long as he is or can put himself in that position, he").

The noble Lord said: This again is little more than a drafting Amendment. On further examination of the Bill it was thought that the word "exercisable" was not as clear as it might be. Subsection (4) says: …as from the time when the right becomes exercisable and so long as it remains exercisable…". It was thought wise, in the interest of clarity, to specify more clearly what was meant by "exercisable", particularly in the case in which the right of the lessor depended upon a notice being given to the lessee and the lessee failed to comply with the requirements of the notice. Therefore the Amendment seeks to insert: he first is, or by notice or otherwise can put himself, in a position to exercise the right and so long as he is or can put himself in that position, he".

That is really for the purpose of clarification. I beg to move.

On Question, Amendment agreed to.


I beg to move Amendment No. 20 which is purely consequential.

Amendment moved— Page 5, line 4, leave out subsection (6).—(Lord Stow Hill.)

On Question, Amendment agreed to.

Clause 4, as amended, agreed to.

Clause 5 agreed to.

Clause 6 [Supplement]:

THE EARL OF KINNOULL moved Amendment No. 21: Page 5, line 39, at end insert ("and any contract for the giving of an indemnity by any person acquiring an interest in a dwelling in respect of any duty so imposed or enforceable in relation to that dwelling shall, to the extent of the indemnity, be void")

The noble Earl said: I wish that I could say that this Amendment was consequential, but it is not; it is basically a probing Amendment. It attempts to fortify the Law Commission's intention to prevent any contracting out of the liability of a vendor under Clause 1. Take the case of a defective house which is being sold cheaply because it is known that it is defective. The fear is that as the clause at present stands the vendor could either seek to negotiate with the purchaser to pay the premiums on any indemnity insurance policy, or even allow the purchaser to give a personal indemnity both for him and for subsequent purchasers. Such an indemnity would virtually, one understands, be the title of the property. The purpose of the Amendment basically is to prevent the purchaser from giving a personal indemnity for either himself or others. The purpose is 'to make certain that any indemnity that is arranged is through a third party; namely, an insurance company. I hope that I have explained this Amendment sufficiently.


I am most grateful to the noble Earl for putting that Amendment down. I do not think that we have the wording right. The contracting-out provisions in that clause require reconsideration. Whether or not the noble Earl's wording is quite right I am not quite certain. If the noble Earl would ask leave to withdraw his Amendment, I would undertake to give careful thought to this matter between now and Report stage. My impression is that some change is necessary and we have our wording wrong. That is my view at the moment.


I am grateful to the noble Lord, and beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Clause 7 [Short title, commencement and extent]:

On Question, Whether Clause 7 shall stand part of the Bill?


I wonder whether I could raise one point? In the Law Commission's Report they emphasise that this Bill should not come into force for at least a year after it passes on to the Statute Book. The purpose was to give insurance companies and others involved time to work out the necessary alterations to their policies. I notice now that it is to come into force on January 1st—




I thought it was 1973, I apologise.

Clause 7 agreed to.

House resumed: Bill reported, with the Amendments.